PIERRE, S.D. – South Dakota grain buyers may be targets of a regional grain sales scheme, warns the South Dakota Public Utilities Commission. The alleged scheme involves grain sellers who enter into a contract without any intention of producing grain to fulfill the obligation. The grain seller then notifies buyers he cannot deliver contracted grain. The grain seller asks the buyer to close the contract and submit to him any difference between the contract price and the current market price. Research into these incidents has indicated the sellers may not be legitimate producers.

The PUC is aware of several specific companies entering into the alleged fraudulent contracts. Grain sellers who have concerns about suspicious sales are urged to contact the PUC at 1-800-332-1782. Questionable transactions have been attempted in South Dakota, Minnesota, Iowa, Nebraska and Kansas.

"We currently know of one grain buyer in our state that has been contacted in what appears to be a scheme," said PUC Chairman Gary Hanson. "We understand that buyer has not been harmed, but it is ever important for all grain buyers to be aware and carefully evaluate requests to close a contract," he advised.

Hanson said it is important for the state's grain industry to be on alert for the alleged scheme and help spread the word. "Grain transactions in South Dakota, by and large, are legitimate and truthful. That is why these egregious actions stand out so much. South Dakotans just don't operate this way," Hanson stated.

The South Dakota Grain and Feed Association and the South Dakota Association of Cooperatives advised their members of the alleged scheme earlier this month.